Some might ask: Did the G20 summit really matter for Saudi Arabia? Do the summit’s outcomes in terms of providing the poorest countries with a debt freeze, financial aid, and vaccine funding, as well as launching the Circular Carbon Economy (CCE) initiative, matter for the world?
The answer to both questions is yes. All these outcomes concern the world in general and Saudi Arabia in particular and should therefore be at the heart of the Saudi strategy.
First, suspending debt service payments for the world’s poorest countries is key because even though these 173 countries outside of the G20 account for no more than 10 percent of the world’s economy today, they are expected to boost economic growth in the future.
Based on estimates by the Organization of the Petroleum Exporting Countries (OPEC), most of Saudi Arabia’s oil growth will come from developing countries, other than India and China, in the coming years.
Economic history indicates that poor countries restore global growth. For example, the global economic growth between 1950 and 1980, a period that witnessed a huge surge in raw material prices, was largely due to a significant improvement in the German, Japanese and Western-European economies.
From the 1980s until the 2008 financial crisis, most of the global growth was due to the boom in China and India, which restored the oil boom in 2003 and gave a strong push to many developing countries such as Russia and Brazil that have abundant raw materials.
The boom of developing countries was the result of a push from rich countries, which are now represented by the G20.
Therefore, helping developing and poor countries is an investment in the growth of the two worlds, as well as that of the oil industry.
Second, the most critical future issue is the circular economy to face global warming. This environmental phenomenon is worsening due to desertification, logging, and increasing greenhouse gas emissions (85 percent of which are carbon dioxide).
The transport sector accounts for 22 percent of these emissions and represents the largest consumer of oil (about 55 percent).
The project proposed at the G20 summit is built on four principles to deal with carbon dioxide more realistically without hindering modern renewable technologies, and curb carbon emissions without impeding the resources of countries that use fossil fuels, especially oil, which can be used to produce environmentally-friendly materials such as blue ammonia.
The projected global growth of electricity from 7.5 TW to 16 TW in 2040 indicates that growth will come from renewable sources, even though one might question their reliability and efficiency.
Maintaining fossil fuels within a more efficient technical framework or as a source of clean energy is more reliable to increase energy demand without hindering global growth and causing injustice to the developing countries that are fossil fuel exporters or need cheap sources.
In conclusion, the G20 summit outlined a post-COVID-19 future to ensure global growth, decrease environmental risks, and face energy challenges, all of which concern Saudi Arabia directly.
This article was originally published in, and translated from, Saudi Arabian outlet al-Riyadh.